While Croatia has now been given the green light to start preparing to mint Euro coins ahead of its entry into the single currency, Eurozone bigwigs in Brussels have told the Balkan nation that the ambitious timeline the government has set itself won't mean corners can be cut.
The Vice-President of the European Commission Valdis Dombrovskis, who is also responsible for the work on deepening the Economic and Monetary Union and strengthening the international role of the Euro was clear on the Balkan country having to meet all the criteria.
"I commend the Croatian authorities for their strong political will to introduce the euro as early as 2023. And that despite the major obstacles and setbacks that the country has been suffering, the European Commission will support Croatia in its effort to meet this timeline. But it will only be possible to achieve if Croatia meets all the convergence criteria."
Meeting strict targets
Controlling inflation, proving stable public finances, pegging the existing currency to the Euro for two years, and meeting strict targets on long-term interest rates.
Croatia's economy is only the 22nd largest of 27 EU member states, 55 times smaller than Germany.
But Daniel Gros, an Emeritus Director at the Centre for European Policy Studies, a think tank based in Brussels says this is more of a political than an economic move:
"Economically it means close to nothing because Croatia is just a very small addition to the euro area economy. Politically it is more important because it shows that the euro remains attractive. Countries want to join when they can even though the conditions are now more restrictive, more severe than they were before."
Croatia's dominant economic sector is tourism, and entering the Eurozone is hugely beneficial for such countries. A recent study by the Croatian National Bank suggests support for joining the Euro among the population has risen from 41% to 45% in the last year. In order to join the Euro, countries have to meet four criteria.
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